Stocks Are Overdue for a Pullback, Warns BofA's Subramanian

• Market is 'overdue for a pullback' and entering a 'seasonally weak period' (September/October).
• Equity allocations have grown, largely due to stock performance, and a 5%+ pullback hasn't occurred in over six months (typically happens 3 times/year).
• BofA raised its year-end S&P 500 target to 7,400 (from 7,100) but still anticipates a 'rough patch' with potential for only 1-2 percentage point gains over the next 12 months, citing concerns about tech, AI, leverage, and Fed tightening.

Savita Subramanian of BofA Securities warns that the market is overdue for a pullback, citing current equity positioning, seasonal weakness in September/October, and the absence of a significant correction in over six months. Despite raising their year-end S&P 500 target, she expects a 'rough patch' due to various market concerns and Fed tightening.